About K-SKY

660 AM The Answer is the one radio station in the Dallas/Ft. Worth Metroplex talking about the issues that matter most to you — politics, pop culture, the war on terror, education, immigration, and much more.

Tuesday, November 29, 2011

Associated Press

www.newstalk.ie

FORT WORTH, Texas —
American Airlines and its parent company are filing for bankruptcy protection
as they try to cut costs and unload massive debt built up by years of high fuel
prices and labor struggles. There will no impact on travelers for now.

The nation's third-largest
airline also said Tuesday that CEO Gerard Arpey had stepped down and was
replaced by company president Thomas W. Horton.

AMR Corp. has continued to lose
money while other U.S.
airlines returned to profitability in the last two years.

Horton said the board of
directors unanimously decided to file for bankruptcy after meeting Monday in New York and again by
conference call on Monday night.

American said it would operate
normally while it reorganizes in bankruptcy. The airline said it would continue
to operate flights, honor tickets and take reservations. It said the AAdvantage
frequent-flier program would not be affected.

Horton said, however, that as
the company goes through a restructuring it will probably reduce the flight
schedule "modestly," with corresponding cuts in jobs.

The company will delay the
spin-off of its regional airline operation, American Eagle, which was expected
in early 2012. AMR Eagle Holding Corp. also filed for bankruptcy.

American was the only major U.S. airline
that didn't file for bankruptcy protection in the aftermath of the 2001
terrorist attacks that triggered a deep slump in the airline industry. The last
major airline to file for bankruptcy protection was Delta in 2005.

Speculation about an AMR
bankruptcy grew in recent weeks, however, as negotiations with pilots and other
workers over cost-saving labor contracts seemed to stall. The company said that
labor-contract rules forced it to spend at least $600 million more per year
than other airlines.

Horton said, however, that
there was no single factor that led to the bankruptcy filing. He said the
company needed to cut costs in view of the weak global economy and high,
volatile fuel prices. The average price of jet fuel has risen more than 50
percent in the past five years.

American was the world's
biggest airline as recently as 2008, but has fallen behind United and Delta
after those two companies bought other airlines.

Fort Worth-based AMR lost $162
million in the third quarter and has posted losses in 14 of the last 16
quarters.

AMR has about $4 billion in
cash and has announced plans to order 460 new narrow-body planes used primarily
in the U.S.,
plus other jets for longer flights.

American was founded in 1930
from the combination of more than 80 smaller carriers. It now flies about
240,000 passengers per day and has about 78,000 employees.

The airline operates out of
five major hubs in New York, Los
Angeles, Dallas/Fort Worth, Chicago,
and Miami. It
has major international partnerships with British Airways and Japan Airlines.